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Concentrations and Revenue Disaggregation

3 Months Ended

Aug. 31, 2020

Concentrations and Revenue Disaggregation

Note 12 – Concentrations and Revenue Disaggregation

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of trade accounts receivable and cash deposits, investments and cash equivalents instruments. The Company maintains its cash in bank deposits accounts. The Company’s account at this institution is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. At August 31, 2020 the Company held cash of approximately $161,797, in excess of federally insured limits. The Company has not experienced any losses in such accounts through August 31, 2020.

Concentration of Revenue, Product Line, Accounts Receivable and Supplier

During the three months ended August 31, 2020 sales to three customers, which each represented over 10% of our total sales, aggregated to approximately 160% of the Company’s net sales at 11%, 12%, and 40%. During the three months ended August 31, 2019 sales to four customers, which each represented over 10% of our total sales, aggregated to approximately 54% of the Company’s net sales at 15%, 15%, 13% and 11%.

During the three months ended August 31, 2020, sales to customers outside the United States represented approximately 26% which consisted of sales in Canada. During the three months ended August 31, 2019 sales to customers outside the United States represented approximately 51% which consisted of 30% from Canada, 15% from Italy and 6% from UK.

During the three months ended August 31, 2020, sales by product lines which each represented over 10% of sales consisted of approximately 22% from sale of introductory kit (shampoo, conditioner and treatment spray), 12% from prep cleanser and shampoo and 39% from sale of fragrance shampoo and conditioner. During the three months ended August 31, 2019, sales by product lines which each represented over 10% of sales consisted of approximately 29% from sales of prep cleanser and shampoo, 16% from sale of moisturizer and conditioner and 30% from sale of introductory kit (shampoo, conditioner and treatment spray).

During the three months ended August 31, 2020 and 2019, sales by product line comprised of the following:

	For the Three Months ended
Hair Care Products	August 31, 2020			August 31, 2019
Shampoos and Conditioners		86	%		80	%
Ancillary Products		14	%		20	%
Total		100	%		100	%

As of August 31, 2020, accounts receivable from four customers represented approximately 95% at 14%, 19%, 27%, and 35% and at May 31, 2020, accounts receivable from one customer represented approximately 69%, respectively.

The Company purchased inventories and products from one vendor totaling approximately $250,514 (86% of the purchases) and two vendors totaling approximately $116,698 (85% of the purchases at 70% and 15%) during the three months ended August 31, 2020 and 2019, respectively.